Govt unlikely to issue decree of necessity to impose taxes – VAT in hands of Parliament

August 13, 2017, 10:57 am

There are no indications that government will issue a decree of necessity to impose tax on citizens and expatriates, especially as the Parliament has completely rejected the plan to implement Value Added Tax and Selective Tax system.

Sources reaffirmed Government’s committed to Article 134 of the Constitution, stipulating the establishment, reform and cancellation of public tax cannot happen outside the purview of law and nobody will be partly or fully exemption from tax in contravention to the stipulated conditions.

Meanwhile, Ministry of Finance confirmed via its official social Twitter page the implementation of Value Added Tax is in the hand of the Parliament, as per the appropriate constitutional procedure. Statement added the relevant Gulf agreement on the implementation of Value Added Tax and Selective Tax approved recently by Cabinet will be referred later to the Parliament for endorsement.

In a related development, MP Waleed Al-Tabtabaei said Cabinet’s approval of Value Added Tax may lead the Deputy Prime Minister and Minister of Finance Anas Al-Sales to grilling podium.

Al-Tabtabaei expressed outright rejection of any plan to resort to the pockets of citizens after Kuwait Investment Authority lost Euros 500 million in a bargain with the French Company Areva, without questioning.

Government sources disclosed the idea of allowing each Gulf country to specify a list of commodities and services to be excluded from Value Added Tax according to each country’s sovereignty was approved in the recent meeting of the Undersecretaries of GCC Finance Ministries.

Sources said the list covers education, Health, real estate, internal transport, oil, gas and their derivatives, and other commodities. They noted the agreement allows each Gulf country to exclude agricultural products, foodstuffs, medicine and medical equipment.

Meanwhile, the MP Waleed Al- Tabtabaei has said he refuses any discussion on Value Added Tax. He stressed the idea of imposing tax should be part of an integrated economic reform that ends with taxation and not to begin with it.

MP Majed Al-Mutairi also refused what he described as “infiltration of Government into citizens’ income” and noted Value Added Tax is part of government’s manipulation the parliament is ready to confront.